5 Charts to Understand the Calamity of Ukraine's Economic Collapse
- GDP is at 60% of its 1990 level
- Housing construction is similar to that of 5 million population russian provinces
- New vehicle sales have collapsed to 1960s levels
- Debt to GDP ratio is at a critical level
- Demographic collapse has resumed
Originally appeared at The Unz Review
And make no doubt about it – a collapse is exactly what it is, and it afflicts way more of the country than just the war-wracked Donbass. Ukraine now vies with Moldova for the country with the lowest average wages in Europe.
Gabon with snow? Saakashvili is hopelessly optimistic. That would actually be a big improvement!
GDP is at 60% of its 1990 Level
As of this year, the country with the most pro-Western revolutions is also the poorest performing post-Soviet economy bar none. This is a not unimpressive achievement considering outcomes here have tended to disappoint rather than elate. Russia itself, current GDP at about 110% of its 1990 level, has nothing to write home about (though “statist” Belarus, defying neoliberal conventional wisdom, at a very respectable 200% does have something to boast about).
Back in 2010, although by far the worst performing heavily industrialized Soviet economy, Ukraine was still performing better relative to its position in 1990 than Moldova, Tajikistan, and Georgia. In the intervening 5 years – with a 7% GDP decline in 2014 which has widened to a projected 9% in 2015 – Ukraine has managed to slip to rock bottom.
How does this look like on a more human level?
Housing Construction is Similar to That of 5 Million Population Russian Provinces
With a quarter of its population, Belarus is constructing as much new accomodation as is Ukraine. 16 million strong Kazakhstan is building more. Russia – more than ten times as much, even though it has less than four times as many people.
The seaside Russian province of Krasnodar Krai, which hosted the Sochi Winter Olympics, with its 5 million inhabitants, is still constructing more than half as much housing as all of Ukraine. No wonder the Crimeans were so eager to leave.
The USSR might have famously concentrated on guns over butter, yet even so, even in terms of an item as infamously difficult to acquire as cars under socialism, Ukrainian consumers were better off during the 1970-1990 period than today. Now Ukrainians are buying as few new cars as they were doing in the catastrophic 1990s, and fewer even than during the depth of the 2009 recession.
And even so many Maidanists continue to giggle at “sovoks” and “vatniks.” Well, at least they now make up for having even less butter than before with the Azovets “innovative tank.” Armatas are quaking in fear looking at that thing.
Debt to GDP Ratio at Critical Levels
And this figure would have risen further to around 100% this year.
Note that 60% is usually considered to be the critical danger zone for emerging market economies. This is the approximate level at which both Russia and Argentina fell into their respective sovereign debt crises.
To be fair, the IMF has indicated it will be partial to flouting its own rules to keep Ukraine afloat, which is not too surprising since it is ultimately a tool of Western geopolitical influence. And if as projected the Ukrainian economy begins to recover this year, then there is a fair chance that crisis will ultimately be averted.
Resumption of Demographic Collapse
Much like the rest of the post-Soviet Slavic world, Russia had a disastrous 1990s in demographic terms, when mortality rates soared and birth rates plummeted. But like Russia – if to a lesser extent – it has since staged a modest recovery, incidentally with the help of a Russian-style “maternal capital” program. In 2008, it reached a plateau in birth rates, which was not significantly interrupted by the 2009 recession.
Since then, however, they have plummeted – exactly nine months after the February 2014 coup. The discreteness with which this happened together with the fact that the revolt in the Donbass took a further couple of months to get going after the coup proper implies that this fertility decline was likely a direct reaction to the Maidan and what it portended for the future.
This collapse is very noticeable even after you completely remove all traces of Crimea, Donetsk, and Lugansk oblasts which might otherwise muddy the waters (naturally, the demographic crisis in all its aspects has been much worse in the region that bore the brunt of Maidanist chiliastic fervor). Here are the Ukrstat figures for births and deaths in the first ten months of 2013, 2014, and 2015:
-- Births --
-- 350658 --
-- 354622 --
-- 329308 --
Furthermore, this period has seen a huge wave of emigration. Figures can only be guesstimated, but it is safe to say they are well over a million to both Russia and the EU.
The effects of this will continue to be felt long after any semblance of normalcy returns to Ukraine.
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